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Friday, February 19, 2016
provisions for income taxes and adjustments attributable to non-controlling interests and non-recurring tax items (notably the
changes in deferred tax assets pursuant to Vivendi SA’s tax group and the Consolidated Global Profit Tax Systems, and the reversal
of tax liabilities relating to risks extinguished over the period).
(*) Items as presented in the Consolidated Statement of Earnings; (**) Items as reported by each operating segment as reported in the segment data.
Cash Flow From Operations (CFFO)
Vivendi considers cash flow from operations (CFFO), a non-GAAP measure, to be a relevant measure to assess the group’s operating and
financial performance. The CFFO includes net cash provided by operating activities, before income tax paid, as presented in the Statement of
Cash Flows, as well as dividends received from equity affiliates and unconsolidated companies. It also includes capital expenditures, net that
relate to cash used for capital expenditures, net of proceeds from sales of property, plant and equipment, and intangible assets.
The difference between CFFO and net cash provided by operating activities, before income tax, consists of dividends received from equity
affiliates and unconsolidated companies and capital expenditures, net, which are included in net cash used for investing activities and of
income tax paid, net, which are excluded from CFFO.
1.2.4 Consolidated Statement of Financial Position
Assets and liabilities that are expected to be realized, or intended for sale or consumption, within the entity’s normal operating cycle
(generally 12 months), are recorded as current assets or liabilities. If their maturity exceeds this period, they are recorded as non-current
assets or liabilities. Moreover, certain reclassifications have been made to the 2014 and 2013 Consolidated Financial Statements to conform
to the presentation of the 2015 and 2014 Consolidated Financial Statements.
1.3 Principles governing the preparation of the Consolidated Financial Statements
Pursuant to IFRS principles, notably IFRS 13 – Fair Value Measurement relating to measurement and disclosures, the Consolidated Financial
Statements have been prepared on a historical cost basis, with the exception of certain assets and liabilities detailed below.
The Consolidated Financial Statements include the financial statements of Vivendi and its subsidiaries after eliminating intragroup items and
transactions. Vivendi has a December 31 year-end. Subsidiaries that do not have a December 31 year-end prepare interim financial
statements at that date, except when their year-end falls within the three months prior to December 31.
Acquired subsidiaries are included in the Consolidated Financial Statements of the group as of the date of acquisition.
1.3.1 Use of estimates
The preparation of Consolidated Financial Statements in compliance with IFRS requires the group’s management to make certain estimates
and assumptions that they consider reasonable and realistic. Although these estimates and assumptions are regularly reviewed by Vivendi
Management, based in particular on past or anticipated achievements, facts and circumstances may lead to changes in these estimates and
assumptions which could have an impact on the reported amount of group assets, liabilities, equity or earnings.
The main estimates and assumptions relate to the measurement of:
revenue: estimates of provisions for returns and price guarantees (please refer to Note 1.3.4);
provisions: risk estimates, performed on an individual basis, noting that the occurrence of events during the course of procedures may
lead to a risk reassessment at any time (please refer to Notes 1.3.8 and 16);
employee benefits: assumptions are updated annually, such as the probability of employees remaining within the group until
retirement, expected changes in future compensation, the discount rate and inflation rate (please refer to Notes 1.3.8 and 17);
share-based compensation: assumptions are updated annually, such as the estimated term, volatility and the estimated dividend
yield (please refer to Notes 1.3.10 and 18);
deferred taxes: estimates concerning the recognition of deferred tax assets are updated annually with factors such as expected tax
rates and future tax results of the group (please refer to Notes 1.3.9 and 6);
goodwill and other intangible assets: valuation methods adopted for the identification of intangible assets acquired through business
combinations (please refer to Notes 1.3.5.2);
goodwill, intangible assets with indefinite useful lives and assets in progress: assumptions are updated annually relating to
impairment tests performed on each of the group’s cash-generating units (CGUs), future cash flows and discount rates (please refer
to Notes 1.3.5.7 and 9);
UMG content assets: estimates of the future performance of beneficiaries who were granted advances are recognized in the
Statement of Financial Position (please refer to Notes 1.3.5.3 and 10); and
Financial Report and Audited Consolidated Financial Statements for the year ended December 31, 2015 Vivendi /35